Every business with activity in Philadelphia files a Business Income and Receipts Tax (BIRT) return with the city’s Department of Revenue by April 15. To file the Philadelphia BIRT, register for a Philadelphia Tax ID, choose BIRT-EZ if all your work happens inside the city or the regular BIRT if you also operate elsewhere, calculate tax on two separate bases (gross receipts at 1.410 mills and net income at 5.71%) using figures from your federal return, and submit online through the Philadelphia Tax Center or by mailing the paper form.1City of Philadelphia. Business Income & Receipts Tax (BIRT)
Do You Have to File
Sole proprietors, freelancers, independent contractors, LLCs, partnerships, S-corps, C-corps, estates, and trusts all owe the BIRT if they carry on business activity in Philadelphia for profit. Businesses based outside the city can still have a filing obligation through nexus: owning or renting property in Philadelphia, employing workers there, or soliciting sales from city residents.
Starting with Tax Year 2025, Philadelphia eliminated the $100,000 gross receipts exemption that previously excused small filers. Every business with Philadelphia activity must now file, no matter how little it earns in the city.2City of Philadelphia. City of Philadelphia Clarifies Business Income & Receipts Tax (BIRT) Policy If you fell under that threshold in previous years and didn’t file, you have a filing requirement now.
Even a business with zero activity for the year has to file a return or submit a No Tax Liability coupon through the Philadelphia Tax Center. Skipping this step triggers non-filer notices and can block tax clearance for license renewals and permits.3City of Philadelphia. No Business Activity? File Your Philly Taxes Regardless If you closed the business mid-year, file a final return and submit a Change Form to close the tax account.
Register for a Philadelphia Tax ID
Before you can file, you need a Philadelphia Tax Identification Number (PHTIN). Register online through the Philadelphia Tax Center or submit a paper application to the Department of Revenue.4City of Philadelphia. Get a Tax Account The paper form also serves as an application for a Commercial Activity License and a Wage Tax withholding account, so you can set everything up at once if you need those. Have your federal EIN (or Social Security Number, if you’re a sole proprietor) ready.
Pick the Right Form: BIRT-EZ or BIRT
Philadelphia offers two versions of the return. Use the BIRT-EZ if 100 percent of your business activity took place inside Philadelphia; the form is shorter because everything you earned is taxable by the city and no apportionment is needed.5City of Philadelphia. Tax Forms and Instructions
Use the regular BIRT if you operated in Philadelphia and at least one other jurisdiction. You’ll complete apportionment schedules to determine what share of your total receipts and net income the city can tax. Since 2015, Philadelphia has used a single sales factor, so the portion of total receipts sourced to the city sets the apportionment percentage.
Calculate What You Owe
The BIRT has two tax bases, and you calculate each one separately. Keep your federal return open while you work — the city’s form pulls directly from those numbers, and mismatches between the two returns are a common trigger for review.
Gross Receipts
Start with total sales before expenses. This figure generally matches the total revenue line on your federal return: Schedule C for sole proprietors, Form 1120 for C-corps, or the equivalent for your entity. You can subtract cost of goods sold (inventory and direct production labor) before applying the rate. The gross receipts tax is 1.410 mills, or $1.41 per $1,000 of taxable receipts.1City of Philadelphia. Business Income & Receipts Tax (BIRT) Multi-jurisdiction filers apply this rate only to the receipts apportioned to Philadelphia.
Net Income
The net income tax rate is 5.71%. Start with the net income figure from your federal return; if you operate in more than one jurisdiction, multiply it by your Philadelphia apportionment percentage.1City of Philadelphia. Business Income & Receipts Tax (BIRT) A business that lost money still owes the gross receipts portion; the net income tax simply comes out to zero.
Submit the Return
Online
The city’s preferred method is electronic filing through the Philadelphia Tax Center at tax-services.phila.gov. Log in with your PHTIN, enter the figures from your federal return, and the system runs the calculations. You’ll get an electronic confirmation on submission and can pay by ACH debit or credit card in the same session.
By Mail
If you prefer paper, download the BIRT or BIRT-EZ from the Department of Revenue’s forms page, sign it, attach every schedule, and mail it to:6City of Philadelphia. Check the (PO) Box. Mailing Tax Payments and Forms to Revenue
Philadelphia Department of Revenue
P.O. Box 1660
Philadelphia, PA 19105-1660
Paper returns take longer to process. An incomplete submission gets flagged and delays your confirmation.
April 15 Deadline and Estimated Payment
The BIRT return for the prior tax year is due April 15. On the same date, you also owe 100 percent of your estimated BIRT for the current year.7City of Philadelphia. Worried About Making Estimated BIRT Payments Next Year? So when you file your 2025 return in April 2026, you pay both the 2025 liability and the full estimated 2026 tax at once.
New businesses filing their first BIRT return don’t owe the estimated payment; they pay only for the prior year’s actual activity. Businesses that weren’t required to file in the last three years because they fell under the old $100,000 threshold are treated as new filers for this purpose and skip the estimated payment on their first return under the current rules.2City of Philadelphia. City of Philadelphia Clarifies Business Income & Receipts Tax (BIRT) Policy On their second return, they can pay the estimate in quarterly installments instead of a lump sum.
Philadelphia automatically grants a 60-day extension to file. If the IRS grants you a federal extension, the city will match it up to the end of the federal extension period. An extension to file is not an extension to pay: interest and penalties start accruing on unpaid tax after the original April 15 due date.
Penalties If You File or Pay Late
Unpaid tax carries a penalty of 1.25 percent of the balance for each month or partial month it remains outstanding, plus interest at an annual rate the Department of Revenue publishes each January.8American Legal Publishing. Philadelphia Code 19-509 – Interest, Penalties and Costs
Failing to file at all carries a fine of up to $300 per offense, and each month the return stays unfiled counts as a separate offense. The same fine applies to filing a false return. A return six months late could accumulate $1,800 in failure-to-file penalties alone, on top of interest and late-payment penalties on the underlying tax. Under Section 19-2809, if those fines go unpaid for more than ten days, the city can pursue imprisonment of up to 90 days.9American Legal Publishing. Philadelphia Code 19-2809 – Penalties and Enforcement The jail scenario is rare, but the fines themselves add up fast.
Credit Against the Net Profits Tax
Philadelphia also imposes a separate Net Profits Tax (NPT) on the net income of businesses and self-employed individuals. Because the BIRT’s net income portion overlaps with the NPT, the city allows a credit: 60 percent of the BIRT paid on net income can offset your NPT liability.10City of Philadelphia. BIRT and NPT: Philly Business Taxes Explained If both taxes apply to you, file the BIRT first, calculate the credit, and apply it on the NPT return.